job creators

Hostess Executives Teach Us All A Little Lesson About Personal Responsibility

dead twinkieToday is really a red-letter day for corporate malfeasance and incompetence here at Wonkette, isn’t it? It is! And such a day wouldn’t be complete without a discussion of the Hostess CEO, whose corporate “maneuvers” might “deprive” workers of some of their pension money by using it for “operations.” (This is corporate speak for saying that the CEOs padded executive pay by stealing money from worker pensions.)

According to a report by the Wall Street Journal, Hostess’ CEO, Gregory Rayburn, essentially admitted that his company stole employee pension money and put it toward CEO and senior executive pay (aka “operations”). While this isn’t technically illegal, it’s another sleazy theft by Hostess executives – who’ve paid themselves handsomely while running their company into the ground. Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.

Let us pause for a moment to note that this is not technically illegal. It seems like something that SHOULD be illegal, probably, and something that WOULD be illegal if done in reverse (i.e. workers taking executive pay in order to subsidize their own pensions) but then again, that would be Class Warfare so maybe it shouldn’t be illegal. Also too, it was because of an accounting mistake. Everyone makes mistakes right? Of course they do. Just a little mistake involving a couple zeros, nothing to get too pissy about.

…Back in 2005 Hostess sent out a letter saying they’d just had a very, very profitable quarter.  Their stock jumped up. The CEO, Charles Sullivan, and many of the senior executives sold chunks of their stock.

[…]

Then, a few weeks later in 2005, came the letter saying that, oops, all of that profit had really been just an accounting error – the company was actually in trouble.  Although the CEO and the top guys had all made a nice killing selling the stock when it was high, and paying a maximum income tax on it of 15 percent because they used the Capital Gains loophole that Mitt Romney used to become a multimillionaire, they now wanted the workers to take a big pay cut.

And they DID take a big paycut, while executive pay soared, and while executives “borrowed” from the workers’ self-funded pensions.

Also, if the CEOs shorted the stock in anticipation of that second letter, they made an EVEN BIGGER KILLING, which again, is probably technically not illegal. Or maybe is illegal, but without any real consequences, making it de facto not illegal, because these are JOB CREATORS we are talking about. Also the CEO wasn’t there when it happened, so it’s not his fault probably, he says.

You know, when we were young and naive, we thought that the people got paid lots of money — like CEOs, for example — got paid lots of money because they were ultimately responsible for everything. Apparently it is the total opposite, and they are responsible for and beholden to nothing. After all, they have the gold so they make the rules.

[Alternet]

About the author

Kris E. Benson writes about politics for Wonkette and is pursuing a doctorate in philosophy. This will come in handy for when they finally open that philosophy factory in the next town over. @Kris_E_Benson

View all articles by Kris E. Benson

Comments

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  • nounverb911

    Why are they carrying Chris Christie out of that building?

    • http://simplyleftbehind.blogspot.com/ actor212

      That's a donut?

    • http://wonkette.com ChillBill

      And why is he being carried by a bunch of Jack Abramoff clones?

    • Esteev

      He has been dieting so, maybe.

      • Callyson

        Ah, so he *is* going to run for president, then. Wonder if he'll go third party when the wingnuts refuse to nominate him…

        • Esteev

          The Gargantuan Oaf Party

    • Isyaignert

      a/k/a Christy Kreme.

  • http://simplyleftbehind.blogspot.com/ actor212

    It's not a crime to steal money that's just lying there earning interest! Why do you hate America so?

  • CrunchyKnee

    Snark aside, one key lesson that my crunchy knees have learned from being in corporate America for 15 years is that the more one gets paid, the less one does.

    • http://simplyleftbehind.blogspot.com/ actor212

      You've learned my tag line well, Padawan:

      If hard work is its own reward, then why do the most rewarded have the easiest jobs?

  • nounverb911

    Maybe next year the Texas State Fair could serve deep-fried Hostess’ CEO Gregory Rayburns instead of deep-fried Twinkies.

    • CrunchyKnee

      Deep fried shit is deep fried shit.

      • http://wonkette.com Lionel[redacted]Esq

        Twinkies, Shit, Modern America Executive. The difference being?

  • OneYieldRegular

    Hostess executives' feet will look particularly nice this holiday season encased in a giant Twinkie (made of cement).

  • http://simplyleftbehind.blogspot.com/ actor212

    *sniff* *sniffsniff*

    Why do I smell torches?

    And….are those pitchforks peeking over the berm there?

    • gullywompr

      I know, right? It's like CEOs are parading past us in those little skirts and high heels, just asking for it.

      • http://simplyleftbehind.blogspot.com/ actor212

        Did you see the tall one? I swear I saw VPL!

    • Esteev

      Nope. Nothing to see here. Didn't you see "job creators" in capital letters?

      • http://simplyleftbehind.blogspot.com/ actor212

        Why is the word "hand" in tiny little letters off to the left there?

        • Esteev

          Because the CEOs are jerk offs?

  • Bluestem

    If by some weird happenstance these alleged "persons" are prosecuted, they'll be able to mount the Twinkie defense.

  • http://wonkette.com ChillBill

    Why would those damn union thugs think they are entitled to self-funded pensions?

  • noodlesalad

    It's only class warfare when it's being done to the rich. When it's being done to the poor, it's the invisible magickal market forces.

    • jello_mold

      How dare you duck when I throw things at you!

  • southernboyman

    Christie is cutting back, only taking one bite. Naw, he's not too fat to be prez.

  • Barbara_

    The technical term for what the executives did is "sponge caking."

    • http://simplyleftbehind.blogspot.com/ actor212

      And that may be the first (and last) time in history the word "cake" was used to apply to Hostess non-ironically.

    • Esteev

      Accounting mistakes sound delicious!

    • mull_man

      Also know as "cream-filling". For example: "I am not a rapist, your honor – I'm a cream filler".

  • Not_So_Much

    Pay the pension fund in Twinkies. They have a longer shelf life than the Poors do who weren't ambitious enough to become the CEO and fuck everybody else.

    I'm all about solutions.

  • coolhandnuke

    Quite a sweet executive business model they confected…the Hostess with the mostest. Let's hope their severance package includes diabetes and a few missing toes.

  • http://lostintarnation.blogspot.com/ SayItWithWookies

    Am I some sort of prophet for predicting this a month ago? No, I couldn't bear the onerous burden of foreknowledge — all I want is the onerous burden of your awe and adulation.

    • http://wonkette.com Lionel[redacted]Esq

      As long as I don't have to tithe to you, you have it.

      • http://lostintarnation.blogspot.com/ SayItWithWookies

        I'm not greedy — five percent will be fine.

  • Goonemeritus

    As a slightly less evil business guy I go to bed each night and ask the baby Jesus to send someone to save Capitalism from itself.

  • jello_mold

    Snark off: HOW is this legal?!

    • TheMightyHaltor

      I think it creates jobs or something.

    • gullywompr

      Who do you think writes the laws? No, it's not the legislators, they just pass 'em (hint: it's the lobbyists).

    • Esteev

      Are you familiar with thimblerig?

    • http://simplyleftbehind.blogspot.com/ actor212

      OK, short answer, it's not really, but…

      Longer answer: If a company can claim it has overfunded its pension pool (which are supposed to be held in trust) it can "borrow" the surplus, leaving an IOU in its place.

      Unfortunately, if they, um, make a mistake, that IOU becomes a general liability of the company and will only be funded to the tune of pennies on the dollar after a bankruptcy.

      And the beauty? The shortfall has to be funded by the Pension Benefit Guaranty Corporation, which is a quasi-public company (think FDIC) and that money comes out of….ta-da! your pocket.

      All this requires is a CPA with less ethics than a crack whore.

      • jello_mold

        Do they even go through the motions of teaching ethics at B-school?

        Bad memories: I had a former "employer" (Cal grad, CPA, MBA Wharton) tell me that because I worked at a startup, I shouldn't expect to get paid. When I took him to the Labor Board he said at the hearing I was killing his dream and he might have to sell one of his houses.

        • mayor_quimby

          Did the board burn him at the stake, or by rotisserie ?

          • jello_mold

            Oh, the hearing officer didn't think much of his argument and he lost. The hearing officer's distain went right over the ex-boss's head. How dare the board find in favor of me! He sure was a contemptuous asshole all around.

            I just don't get these upper upper middle class toadies' thinking. What do they think us poorz are, airetairians?

            I swear these fucks think slavery is a viable business plan. It's just that the word "slavery" is SO tacky.

      • Tundra Grifter

        For a few years during one of the recent stock market booms, many companies were reporting "profits" that consisted entirely of underfunding employee pension plans.

        Because those plans have assets "marked to market" and use "market assumptions" in good years the actuaries can project rapid growth.

        Of course, when reality sets in…well, what do you expect when reality sets in?

  • BigSkullF*ckingDog

    Outrage overload. Can't. Take. Anymore.
    JEYF&^8OJUGHked^8^^&*FY9PQ3487OJIKDFMG'ALIERN 0Q349UTJP3Q ALSO, TOO.

    • http://simplyleftbehind.blogspot.com/ actor212

      Here. Look at this and breathe.

      • BigSkullF*ckingDog

        Some guy in his underwear? Gross.

        • gullywompr
          • BigSkullF*ckingDog

            Yes! That actor. I thought he knew me better than that.

          • http://simplyleftbehind.blogspot.com/ actor212

            Hey, I worked hard for that body!

          • gullywompr

            Try buying him a few drinks next time.

          • http://simplyleftbehind.blogspot.com/ actor212

            Roofies work faster

          • HistoriCat

            At least he wasn't scaring you with kitties!

          • BigSkullF*ckingDog

            That thing was kinda scary.

    • http://wonkette.com/ weejee

      Or this, or this.

      • BigSkullF*ckingDog

        If you could find some CEO types being, at a minimum, pilloried that would be great. Drawn and quartered would be better. Roasted slowly over coals would be best.

        • http://wonkette.com/ weejee

          I'll look, but how's this for now?

        • Isyaignert

          I've always been fond of the classics, like tar and feathering, then the stockades where the 98% throw rotten eggs and tomatoes at them, followed by being run out of town.

          However, having just watched "Trading Places" for the 35th time (it's my Christmas movie), where Eddie Murphy says, "The best way to get back at rich people is by turning them into poor people" and then at the end where the lovely island girl says when offered shrimp or cracked crab for lunch and says, "Can't we have both?" Yes, I want these mofos shamed AND poor.

          • BigSkullF*ckingDog

            You make a compelling argument, but I would prefer more violence.

  • http://wonkette.com Lionel[redacted]Esq

    If the workers had wanted their pensions protected, they should have become upper management.

  • Callyson

    this isn’t technically illegal

    Oh, for fuck's sake.

    • http://wonkette.com Lionel[redacted]Esq

      It is technically legal, which is the best kind of legal.

  • http://wonkette.com Lionel[redacted]Esq

    Well, since FOX News has spent the last two days covering an idiot contributor of theirs and Breitbart being punched by a guy he threw to the ground, I'm sure they will be given similar coverage to this side of the labor debate. They are fair and balanced, after all.

  • Esteev

    Will no one think of the monoglycerides and diglycerides?!

    • glasspusher

      Polly wanna sorbate?

      • Esteev

        Uh, ya got any cellulose gum?

        • glasspusher

          Xanthan gum. It's the best.

          • http://simplyleftbehind.blogspot.com/ actor212

            CHICLE LIBEL!

          • glasspusher

            I can do this all day, pal. I used to work at National Starch and Chemical Corporation…they invented the Cool Ranch flavor for Doritos when I was there (shudder).

    • http://simplyleftbehind.blogspot.com/ actor212

      Damn diglycerides, always trying to get equal rights. DoMA, bitches!

  • Allmighty_Manos

    Get a clue. If old people have a decent pension who is going to greet us at Walmart or mop up gas station bathrooms? Hostess is just keeping our economy running as a whole.

  • Callyson

    accounting error

    In other words, "oh shit–we thought we could get away with it, but they're on to us. What to say, what to say…"

    • Esteev

      "I don't recall" is always a good fall-back crutch.

  • SexySmurf

    OT Arrest Made After Oates Bites Hall's Face.

    Oh, oh, here he comes. He's a man-eater. Watch out boy, he'll chew you up.

    • glasspusher

      That's why I stick to Garfunkel and Oates.

    • Esteev

      I most certainly Can't Go For That.

    • http://wonkette.com smokefilledroommate

      It's a bitch, girl

      • not that Dewey

        You've gone too far.

        • Negropolis

          But it doesn't matter anyway.

    • http://simplyleftbehind.blogspot.com/ actor212

      Hm, my headline for this in Wonkville was funnier.

    • Dildeaux

      Darryls Big House

  • DahBoner

    It's only called stealing when rich people are victims.

    When you steal from the non-rich, that's just GOOD BIDNESS…

    • Esteev

      Are you a policymaker too?

    • Isyaignert

      True dat! The only reason Bernie Madeoff went to jail is because he stole from rich people.

  • glasspusher

    "Tell 'em about the twinkie"

    "What about the twinkie?"

  • http://wonkette.com smokefilledroommate

    Who needs a pension when you can have a Twinkie? Oh, wait..

  • http://gratuity.wordpress.com/ Gratuitous World

    and all those poor workers with Snowball Lung getting fucked out of their deferred compensation.
    This guy should rot – unlike his edible non-food products.

  • Botlrokit

    This is the most delightful part about these assholes: It's on their resume now.

    So you have experience in management, eh? What titles have you held?

    Chief Operations Officer.

    Tell me about your education.

    I received an MBA from Harvard University Graduate School of Business in 1998, with undergrad work at Princeton; that was a BA in Comparative Literature in 1992. Graduated summa cum laude from Harvard.

    And for what company did you serve as COO?

    Ding-Dongs.

  • http://wonkette.com ManchuCandidate

    Seriously folks, this has been happening for decades. Ever since Raygun dropped pension requirements in US Amercia corps.

    When a CEO and his buttlickers get their bonuses and the money for stock options where does it come from? Not the actual operations budget because that would be stupid. They get their bonus cash from the big bucket of pension money that hasn't been vested yet. Then they turn around and cry that they need to increase the cost of health insurance, copays, and cut back on your pay increases.

    It's all legal.

    Of course, this is why the CEOs shrieked like crazy when in 94 accountants wanted to change the rules to account for these monies. A few bucks to the proto Teabagger Newty Toot led GOPers and voila! No accounting changes. If the changes had gone through then everyone would realize that the profits (and pension money) was going to execubots.

    • Isyaignert

      Brilliant and simultaneously hilarious – "execubots"!

  • glasspusher

    Someone's heading for one hell of a wrist-slapping.

  • Antispandex

    Maybe this is why Public Employee pensions are so unpopular? I mean you konw your boss is going to fuck you out of yours, so why should ANYONE get one! I mean, it's only fair, amiright?

    • jello_mold

      Doesn't that sum up the entire rw argument against soc security?

      • http://yunoletmehavecoolwebnameblogspot.blogspot.com/ Jennyjen798

        Honestly, I think that sums up their argument about everything.

  • WhatTheHeck

    The CEO’s are rolling around in a lotta dough right now.

    • GeneralLerong

      How do we turn them into Pigs In Blankets?

      There has to be a way to roast these motherfuckers, now that burning pyres are so 16th century.

  • smellypossum

    Sitting here at work attempting to invent a Hostess-inspired equivalent of waterboarding: Twinkieboarding. Must be something befitting these pension-plundering assholes…

    I am SO not good at inventing torture techniques.

    • HistoriCat

      Forced feeding – endless Twinkies … and when they can't take anymore? You scoop that mess up and feed it to them again.

    • shelwood46

      Cremefilling. Just shove one of those creme injectors in their mouth and turn it on until they pay the pension money back.

      Uh, with votes.

  • Supremectjester

    I love the smell of class action lawsuits in the morning

  • BigSkullF*ckingDog

    The CEO of my company makes around 10x my salary. With annual bonuses maybe makes that 12-14 times. Should I hug him next time I see him?

  • christianmuslin

    Why didn't they think of the children?

  • http://sciencekick.blogspot.com valthemus

    Stock manipulation, a little pension fund raiding… whatever. But now, they've taken away our snack cakes… it will be their LAST mistake!!

    "… I am going to ask you some questions. And every time you don't give me answers, I'm gonna cut something off. And I promise you, they will be things that you will miss!"

  • notanncoulter

    It's finally sinking in… why I spend so many days just plain pissed off and disheartened.
    Oh for fuck's sake will this shit NEVER stop?!

    • Isyaignert

      Until more of these fukkers start being prosecuted and jailed, the fleecing will continue.

  • StealthMuslin

    It's wrong to wish people dead. It's wrong to wish people dead. It's wrong to wish people dead…

    • GeneralLerong

      But it's not wrong to wish them wrung like sponges, sent to federal prison, impoverished and living below an underpass when they get outta the pen, is it?

      Now just how to we get that done?

  • Spider-Jerk

    What are some specific changes that would have to take place to make shit like this not happen? There had to be some sort of regulations or laws in place at some time to prevent this.

    • GeneralLerong

      I'm guessing federal prison sentences would have to be involved. Also confiscation of assets, right down to the little diamond pinky ring.

    • http://inappropriatejobpostings.blogspot.com/ fuflans

      elizabeth warren in the senate.

  • cousinitt

    What? I didn't know irony had a creamy center.

  • HistoriCat

    You know, I could take care of this problem in a day. If only I could find a good deal on some pikes …

  • Tundra Grifter

    So Executive Management used the workers' pension monies to run the company (and pay their own bloated compensation) and the workers never thanked them for it?

    How ungrateful!

  • pdiddycornchips

    That unions caused the death of the Twinkie is embedded now in our Corporate Media hard drives. Nothing to the contrary can be true no matter how factual. It has been decided. Unions are greedy and CEO's are paid well 'cause they are super special people. Sometimes they do illegal things but we cannot treat them like criminals. They are special.

    • Redgyal

      Like Ken Lay.

  • mormos

    so…much…rage…

  • Redgyal

    Now if they had taken $100 from a cash register at a 7-11, THEN that would be theft.

  • Walkinwiddaking

    It must be some airy poundage if you can get that many old guys together and dead lift a Twinkie.

  • http://inappropriatejobpostings.blogspot.com/ fuflans

    you know, i'm beginning to think the free market is mostly a chimera intended to conceal the fact that rich people are often pricks intent on proving there's a sucker born every moment.

  • LadyWisdom

    Dear Wonkette please stop linking to subscription articles at the Wall Street Journal. It gives Rupert Murdoch page clicks but unless you subscribe they won't let you read the article. They win, we get nothing.

    Thank you.

  • MissNancyPriss

    Alone here, just laughed til sobbing over that photo.

  • Zombie_Reagan

    So it wasn't union thugs looting their own pension fund? You could knock me over with a feather.